India’s FMCG Sector Sales Contract 34% In April, Says Nielsen India

Mom and pop stores channel saw a 38 percent contraction in value in April

A cutomer walk through a food aisle at a Big Bazaar hypermarket. (Photographer: Dhiraj Singh/Bloomberg)
A cutomer walk through a food aisle at a Big Bazaar hypermarket. (Photographer: Dhiraj Singh/Bloomberg)

India’s fast-moving consumer goods sector sales contracted by value in April as demand for shampoos, detergents and other non-food items fell for kirana stores during the lockdown to contain the Covid-19 pandemic, according to Nielsen India.

The FMCG industry’s sales value, a combination of volume and prices, declined 34% year-on-year in April, according to the market researcher. The mom-and-pop stores channel saw a 38% contraction in value, while supermarkets and hypermarkets registered a value growth of 5%.

A traditional store remained closed for 12 days on an average during the month compared with eight days for grocers and four for chemists.

Consumers resorted to stocking pantry items a week prior to the lockdown. But after the stay-at-home orders, sales of supermarkets and hypermarkets slowed in the first two phases of the curbs from March 23 to May 3. Cash-and-carry stores recovered in the second phase that started on April 13.

  • Value of food products sold through modern trade grew 14% by value in the first phase of the lockdown but contracted to 12% in lockdown 2.0.
  • Non-foods value contracted 28% in the first phase and fell 40% in phase two, Nielsen India said.
  • In cash-and-carry stores, value of food contracted by 2% in the first phase but recovered in the second phase to grow 20%.
  • Non-foods witnessed a higher contraction in the first phase at 56% compared with a decline of 25% in the second.

Sales of hand wash, sanitiser and floor cleaners through the modern trade channel rose 11% year-on-year in the first phase and remained flat in the second phase.

Demand for staples like packaged atta and ghee was high in the first phase of the lockdown through modern trade. In the second phase, convenience foods like vermicelli and noodles continued to grow.

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Nielsen India said the selling price of key food items increased during the lockdown due to a slowdown in retailer-led promotions and change in brand and price mix. Private labels gains traction during the lockdown as their share increased 5-6 percentage points from the pre-Covid-19 period.